Construction machinery under the 2020 epidemic has grown against the trend, and the sales of excavators have increased by more than 50% for several consecutive months. China has become the only growing country in the world, with a growth rate of 2% to 2.2%. What happened this year, and what outstanding changes in the construction machinery industry? At the time that the Sixth Member Congress of the China Construction Machinery Industry Association was held, the leaders of the construction machinery industry gathered in "Dragon City" Changzhou to discuss the high-quality development of the industry.
In the high-level dialogue session held in the afternoon, under the auspices of the new Secretary-General Wu Peiguo, Zhuo Puzhou, Chairman of China Railway Engineering Equipment Group Co., Ltd., Cheng Xiaoming, General Manager of Hitachi Construction Machinery (Shanghai) Co., Ltd., and Kobelco Construction Machinery (China) Co., Ltd. Six industry leaders, including General Manager Nishioka Keys, President of Hyundai Heavy Industries (China) Investment Co., Ltd., Kim Sang-xiong, Secretary of the Party Committee of Liaoning Sansan Industry Co., Ltd. Lu Chunlei, and Deputy General Manager Zhou Jun of China Communications Tianhe Machinery Manufacturing Co., Ltd. Some sharing of challenges and opportunities:
1. What are the main opportunities and challenges in 2021 and China's construction machinery industry?
Cheng Xiaoming: In 2021, we will talk about opportunities and challenges. In terms of opportunities, 1. Political and economic. 2021 is the first year of the "14th Five-Year Plan", including the relationship with the United States. This is China's development and the international environment. , 2. Financial environment; 3. Timing of country 4. Taken together, next year and this year will be about the same or a slight decline. This is an opportunity.
In terms of challenges, my biggest challenge is the price crisis. As far as Hitachi is concerned, we believe that our current vision is to put price equal to value, because this is the characteristics of the domestic market, price and value, and domestic customers’ perception and There are still gaps abroad. If price equals value, it is price for us, and price is the most direct for all companies. The price crisis may become more intense next year.
The future will be a little 50 tons faster and a little twelve or three tons slower. The rules of our game will be greatly changed. The rules of the game are not only technology, but also services. Our living environment will change in the future. This is a change brought about by technological innovation.
Second, from the perspective of circulation, we see that whether it is a lease or a sharing model, the customer now pays more attention to his cash flow. For the customer, he does not have to buy it. He will definitely calculate his account. Like face and prefer money, this kind of change has a greater impact than technological change to some extent. The future cannot be said to be high-end. It is necessary to understand the needs of customers and provide them with real value.
Nishioka Keiji: First of all, the host asked what are the opportunities and challenges. First of all, I think the opportunities are environmental protection, and the challenges are quality, R&D and cost.
First of all, if we talk about environmental protection, we can say that we have made improvements in emission standards in the past few years from 2015 to 2019. Throughout the past, there have been substantial reductions in emissions. However, non-road construction machinery accounted for The emission ratio has increased from 15% to the current 25%. In the past few years, automobile emissions have been greatly reduced. Therefore, among the proportions, the proportion of construction machinery has become very eye-catching. As the future trend of the industry, electrification is an inevitable trend.
In addition, with the decrease of China’s working population, I think that in the future, in construction machinery, as the equipment itself becomes intelligent, this aspect can effectively make up for the shortage of labor and the shortage of construction machinery operators in the future, so I think this aspect There is a need for intelligence. Unlike other big brands, we focus on the category of excavators in construction machinery, but we also have a history of 90 years, especially environmental machinery, that is, the share of car dismantling machines and metal resource recycling machines in Japan. Very high, reaching 40%, so our accumulation of technology and experience in this area will help us make our due contribution in China.
Kim Sang-xiong: Hello, everyone. I am Kim Sang-xiong, the president of Heavy Industry China Investment Co., Ltd. I have just been in China for a few months, and I want to share with you the three-month experience in China. I was engaged in the business of construction machinery management in European countries for 20 years. Before, I was managed by an expert in China. By chance, I received such a temporary order, so I was sent to China.
Three months after coming to China, it is obvious that the Chinese construction machinery market is completely different from the markets of other countries. The diversified demand, quality and sales network power in this market have exceeded our previous imagination.
Generally speaking, the Chinese market will definitely undergo constant changes. It has been 25 years since the first foreign brands to enter the Chinese market, and they are also brands that have created a market share of 25%. We suffered a lot when the industry experienced a downturn in 2013-2015. At that time, our situation also changed a little. After that, we also brought some growth changes.
I would like to take this opportunity to emphasize that the Chinese market is the most important market that any brand must not miss. In response to the recovery of the world and the economy, especially the domestic market demand in China, in the face of such a situation, we have also made preparations from many aspects, and re-recognized that these trends through cost reduction will also be closer to globalization in the future.
I now hope that in the future I can carry out marketing activities that are more in line with the Chinese market, will develop more products that meet market needs and user needs, and will also reduce costs through global procurement. We have also established such a plan. Therefore, we must continue to improve our product development capabilities. We now believe that product independent research and development capabilities are the most important piece. Although I have only been in China for 3 months. But there are many faces that have been known before, especially a pattern like this one.
I also think that it is better for the market to be more stable in the future. Therefore, it is necessary to continuously reduce costs and upgrade products. Through healthy competition, the order of the market can be more stable. Pressures such as price will also affect quality, which will eventually lead to debt problems. , Will eventually affect our agents, so how we will carry out activities and survive in the Chinese market in the future, we have also sorted out a lot of plans, through close cooperation with agents, through the aftermarket investment to enhance the vitality.
Zhuo Puzhou: I personally think that next year will have great opportunities and great challenges. Of course, which one is bigger than that, maybe the opportunity is slightly bigger, there are four points in terms of opportunities. 1. The domestic double cycle will promote economic development; 2. The emergence of new infrastructure is endless; 3. The overall level of the industrial chain is relatively high; 4. We serve engineering. I feel that mechanized construction has been increasingly recognized by the industry and customers in recent years. This is also a great opportunity for us.
The challenges I mainly mentioned are mainly due to the following factors. 1. The uncertainty in the past few years is very large; 2. The situation of relative concentration and dispersion has become clearer and demand is more difficult to focus. 3. Great changes have taken place in customer needs. The first is that customers are paying more and more attention, and the second is that no matter what, affected by the epidemic, it is now in a period of economic downturn, and it is inevitable that customers will have purchasing power during the downturn. influential. 4. What is more prominent this year is the all-round competition. In addition to quality, price wars are more intense, and the dispersion of prices in some places is also relatively large.
China Railway Equipment will focus more on products and services in the future. In order to cope with these two changes, one is to make more innovations in products and services itself, and the second is to make management innovations so that the company can carry out technological innovation. Good actions make technological innovation more possible. This is my opinion.
Zhou Jun: Regarding the opportunities and challenges in 2021, in our view, because we have reached no man's land in the field of shield equipment, the current technology of shield machines can no longer satisfy our country's construction and development. 2. Autonomous and controllable parts and components of the independent industrial chain are the main restricting factors for our peak. 3. In the next few years, intelligent services will be our key development direction in the tunnel field. From the tunnel field, we must avoid human errors. Intelligent operation and remote management will become the main development direction. 4. The transformation of business model. In the field of tunnel machinery, the business model has mainly turned to the leasing model. In particular, Tianhe’s leasing has accounted for 80 to 90%. Such a large leasing share has led us to use leasing methods. Innovative services must be made in this field. Intelligent services, especially intelligent remote management and intelligent remote operation, have become very important means for the next step of research and development. These means are used to control the flow of funds and control various risks. And the further revolution in remote technology and the reduction of construction costs have great benefits. In the future, from the perspective of business models, leasing will occupy the main market and enable us to make further innovations in the advancement and reliability of equipment.
Lu Chunlei: In terms of challenges, as a private enterprise entering the shield machine industry, I feel a little weak and my muscles have not yet grown. 2. It is you who can hold the future. When we are confused, we often say to ourselves that we must be yourself if we want to win the respect of our competitors. Opportunities: 1. The traditional infrastructure field has been expanded to the mining field, and there are very new application scenarios in this field. 2. Expand new products. For example, on the basis of traditional shield machine, we have developed mining TBM. Only with product innovation can we win future development.
2. Chinese companies already account for 70% of the Chinese market. What are the considerations and plans of the leaders of the three foreign-funded companies in the Chinese market?
Nishioka Keiji: In his speech just now, Chairman Wang Min mentioned that XCMG will enter the mid-to-high-end market in the future. I think that the value of customers does not mean that just reducing sales prices can greatly increase the value we create for customers. Therefore, I I think that the future requirements in terms of technology, performance, quality, etc., how to condense the strength and energy of the enterprise more in this regard, and think about how to create greater customer value, I think this trend will be stronger in the future.
But on the other hand, in the Chinese excavator market, the current trend of 70% of Chinese capital and 30% of foreign capital, I think it is impossible to return to the past trend of foreign capital occupying the main market. With the irreversible proportion of Chinese and foreign investment, how to create greater user value? I think this is a very big issue. As a foreign-owned excavator manufacturer, how do we solve the needs of customers, how to build a sustainable society in the entire environment in the future, and how do we create excavator products that the market needs?
I also asked about the challenge just now. I didn't talk enough just now. Just now, Mr. Jin mentioned that the very big challenge for foreign brands in the future is how to do more cost control without reducing quality and performance.
Cheng Xiaoming: Keeping pace with the market and walking with customers. For us, if we want to make a difference in entering the Chinese market, we must have a better development in terms of cost and quality in the future, so rooting in China is also Our company policy.
Kim Sang-xiong: I have the same opinions as the previous ones. With the rise of domestic brands, the impact on foreign brands is still quite large. As a foreign brand with 3% of the excavator market share, how to survive is indeed a difficult issue to deal with . However, the Chinese market occupies an important share of 50%-60% of the global construction machinery market, and our strategy must be adhered to.
Recently, I feel that the needs of Chinese users are the same as those of global users. Any product that meets the Chinese market also means a global product. We will definitely improve our product development capabilities and develop and launch products that meet the needs of the Chinese market and users as soon as possible.
Secondly, the potential of the Chinese market is still great. Because China’s production base is relatively competitive in terms of competitiveness, we plan to transfer the production of Korean domestic brands to China for production. I believe that with this volume and production base Conversion, our brand can continue to bring about stable development. A method like this will be launched in a short time. I believe that products that conform to this type must also conform to globalization. Therefore, a product that is more compatible with globalization will continue to Hard work and go all out.
3. Predict what kind of trend the shield machine market will look like in 2021. Will it grow, remain flat or decline?
Zhou Jun: As far as the tunnel field is concerned, I think it will be growth in 2021. The growth of our field is actually related to our technological innovation. I believe that the growth of this market will continue for 5 years and 10 years.
Zhuo Puzhou: I think from the perspective of infrastructure pull, coupled with the increasing support for mechanization and the influence of construction population factors, I think there will be a moderate increase, but the growth rate will be reduced because we The basic plate of is basically big, and our market is also a niche market of 2B2.
Lu Chunlei: The conventional fields will grow slowly, and the emerging fields will grow rapidly. Our industry is full of expectations.
4. How do several foreign brand leaders see the trend of excavators next year?
Nishioka Keiji: I think 2021 will be the same as 2020.
Cheng Xiaoming: I think 2021 is about the same as 2020 or there will be a 10% drop from this year. For me, there are two factors. One is the issue of debt, and the other is the issue of second mobile phones. If these factors are not considered , There will be growth next year.
Kim Sang-xiong: The excavator product is also divided into small digging, medium digging, and large digging. If you want to increase market share, the sales of small digging can not be ignored. If the entire demand next year is predicted, it will definitely be an upward trend. Keep the same with 2020.
The accuracy of the participants' forecasts on the excavator and shield machine market remains to be verified. But we believe that no matter what volatility occurs in the Chinese market, our growth potential and momentum actually exist.
